A combination of emerging technologies is poised to become the next investment frontier.
The 'metaverse' is not a new concept, but with Facebook’s rebranding to Meta, many business sectors are eager to take advantage of this emerging trend. Investors need to pay attention when Roblox, a video game company built on the metaverse concept, attains a whopping $38 billion market cap in its first ever trading session. Games “evolving into metaverse economies” was also one of the prominent topics of discussion by Microsoft’s CEO during the company’s most recent quarterly earnings call, touting the technology as a real long-term opportunity.
Metaverse, Web 3.0, and NFT's together represent an alternative vision of the future of the internet. Within a short time they have become a mainstream concept, right out of science fiction, and they hold huge potential for the business world. Analysts suggest that several large tech stocks will benefit from this revolution, regardless of macroeconomic issues. For them, it is a highly lucrative space for digital products. Not just tech, but luxury brands are also getting in on the action. Gucci, Ralph Lauren, Nike and Balenciaga have already forayed into the space.
The future is definitely immersive, and certain stocks will gain much ground riding this trend. Let’s look at a few of them and their predicted dividends.
Metaverse-Related Stocks with Maximum Growth Potential
1. NVIDIA Corp
Semiconductor firms are poised to be the beneficiary of the huge demand for computing power in the metaverse. Nvidia has solutions for next-generation technologies like IoT, cloud computing and AI. Its chipsets and graphics processing units (GPUs) are required to run highly complex algorithms and boost computing power. The company paid $100 million in quarterly cash dividends in Q3 2021. It is expected to announce a $0.04 per share dividend for Q4 2021 on February 23, 2022 with ex-date of 8th March.
2. Microsoft Corp.
Microsoft’s recent acquisition of video game giant Activision Blizzard gives it a sound footing in the metaverse space. It reflects CEO Satya Nadella’s view of the technology: that metaverse is essentially all about creating games. The company has positioned Microsoft Mesh as the underlying framework for the Metaverse. It is also one of the companies in the heated battle among tech giants for creating the next-gen VR/AR headsets at an affordable price for widespread customer adoption.
Microsoft announced a quarterly dividend of $0.62/share in December 2021, which is payable on March 10, 2022, with ex-div date of February 16, 2022. The company is expected to declare a quarterly cash dividend of $0.62/share on March 15, 2022, with ex-date of 18th May.
3. Intel Corporation
The next generation internet solution, Web 3.0, would likely not be possible without the foundational technology of Intel to enable blockchain solutions. Intel, along with community leaders of Ethereum, launched the TC API in 2018 to enable transactions on an off-chain computer environment and then return results to the main Ethereum blockchain. With the Sawtooth blockchain platform, the company has created a highly secure and efficient environment for business operations.
Intel declared a quarterly cash dividend of $0.365/share on January 26, 2022, which is payable on March 1, for shareholders of record on February 7, 2022. Woodseer is forecasting the next dividend with an ex-date of 5th May, also at $0.365.
4. Adobe Inc.
Adobe has a huge opportunity in the metaverse, helping companies create games, videos, and much more on its platforms, enabled with 3D and immersive technologies. For instance, users can use Adobe Designer to create parametric 3D assets. They can create virtual scenes in Substance 3D Stager. In its Q4 earnings call, the company declared that its Digital Media business delivered $571 million of net new ARR, and Substance grew 100% YoY due to increased demand from Metaverse platforms. The company has, however, not paid a dividend since 2005.
It does have 2 important aspects necessary for dividend growth, which is free cashflow growth and profitability. While it has been one of the best-performing stocks for the last 10 years, it is still in the growth stage even after a decade of great returns. It continues to make acquisitions to support its core businesses, which need cash. We don’t expect Intel to pay a dividend in the near term unless it sees meteoric cashflow growth.
5. eBay Inc.
In 2021, eBay entered the NFT space by allowing the tokens to be sold on its platform. The company also stated that it will accept cryptocurrencies as payment for these collectibles. Beyond NFTs, eBay is also working towards introducing other “blockchain-driven collectibles” on its platform. It is the first ecommerce company in the world to have delved into the NFT frenzy and is poised to gain from its surging popularity.
eBay last declared a quarterly cash dividend of $0.18 on October 27, 2021, which was paid on December 17, 2021. We are forecasting the next cash dividend of $0.21 with ex-div date of 24th Feb.
6. Unity Software Inc.
Unity Software has been used to develop 70% of the best 1,000 mobile games and it will be used to create metaverse content as well. Unity’s technology is often used in the creation of NFT games too. With its acquisition of Weta Digital, Unity is also poised to help artists involved in the Metaverse landscape. Weta’s platform has been used to create visual effects for some of the most iconic movies and TV shows, including Game of Thrones.
The company, however, doesn’t pay dividends yet; should a maiden dividend be announced Woodseer will update with forecasts from that point forward.
Forecasting Dividends in the Era of Emerging Technologies
Currently, only big tech is chasing the metaverse. But, as metaverse becomes a way of life in the future, practically every sector will strive to get a piece of this pie. A similar trend is expected when it comes to blockchain technologies and NFTs, which promise to bring in a revolution in the entertainment industry. Consequently the effect on dividends will widen over time and we will continue to watch this space.
Woodseer Global, with its hybrid algorithm+analyst approach, keeps tabs on the changes in dividend policies of the largest companies active in this arena. We offer our clients real-time and accurate dividend forecast data for making informed decisions related to pricing options, stock evaluation and effective portfolio management. Contact us to learn more.